The Ukrainian National Security and Defense Council plans to legally restore state ownership of the Motor Sich company (Zaporizhia), the largest manufacturer of aircraft engines and gas turbines in Ukraine.
The Ukrainian National Security and Defense Council’s Secretary Oleksii Danylov announced this on 11 March, the CFTS portal reports, citing the Interfax Ukraine news agency.
"We are talking about the Motor Sich company in Zaporizhia. As of today, a decision has been made according to which the Motor Sich company will be returned to the Ukrainian people. The ownership of the company will be returned to the Ukrainian state legally and constitutionally in the near future," Danylov said at a news briefing following a meeting of the National Security and Defense Council.
According to him, every enterprise in the Ukrainian military-industrial complex that "miraculously ended up in private hands" will be considered separately.
He added that other strategically important enterprises would also be nationalized legally.
Speaking on behalf of Motor Sich’s Chinese investors, the Chinese-based Skyrizon Aircraft Holdings’ owner Wang Jing recently described the Ukrainian authorities’ statements about the possibility of nationalization of the Motor Sich as unacceptable and threatened to file new lawsuits against Ukraine.
Before that, Motor Sich’s Chinese investors increased their international arbitration claim against Ukraine by USD 100 million to USD 3.6 billion. According to the Chinese investors, the Ukrainian authorities expropriated their investments and violated their rights under the October 1992 Ukrainian-Chinese intergovernmental agreement on promotion and mutual protection of investments.
In accordance with a decision by the Ukrainian National Security and Defense Council and a presidential Ukraine dated 28 January, three-year sanctions were recently imposed on Chinese citizens and companies attempting to exercise their rights as shareholders of Motor Sich.
According to a government source, a group of Chinese investors currently owns about 75% of the shares in Motor Sich and part of a disputed block of shares in the company was used as collateral for funds provided by the China Development Bank, among others.
Wang’s Beijing Xinwei Telecom Technology Inc. (China) announced in early August 2020 that it had abandoned its attempt to obtain permission to purchase Motor Sich jointly with the Ukroboronprom state defense concern. Oleksandr Yaroslavskyi’s DCH Group is now the Chinese company’s new partner. The companies have unsuccessfully applied to the Antimonopoly Committee of Ukraine for permission four times. They filed the most recent application in December last year.
Another attempt to hold a meeting of Motor Sich’s shareholders on 31 January this year was unsuccessful because of the freezing of 41% of the company’s shares in 2017 at the initiative of the Security Service of Ukraine. The remaining shares in the company were frozen in 2018.
Motor Sich is one of the world's largest manufacturers of aircraft engines and industrial gas turbines. It exports its products to more than 100 countries. Motor Sich made a net profit of UAH 930.2 million in January-September 2020, compared with a net loss of UAH 532.7 million in the same period in 2019. Its net revenue increased by 20.2% to UAH 7.660 billion.